The changing world of public procurement
Public procurement is undergoing significant change. The pressures on Government to eliminate waste and ensure more effective use of public money have resulted in a growing focus on commercial skills and judgment, with the expectation that procurement policies and practices must change.
In my third blog drawing from the recent World Bank Conference in Washington D.C., I am drawing from a presentation delivered by Dan Gordon. Dan is Associate Dean for Government procurement law at George Washington law school, but prior to that post he was President Obama’s Administrator for Federal Procurement Policy. He offered his views on eight current trends in public procurement that are causing issues or potential challenges (Dan will shortly be covering these topics in more detail on an IACCM ‘Ask the Expert’ interview).
- Growing use – and potential misuse – of e-procurement, including electronic reverse auctions
- A more inclusive assessment of price, attempting to look at overall ‘cost of ownership’
- The use of non-price factors in evaluation, especially qualitative value judgments
- Framework agreements – and in particular, who gets the business when there are multiple suppliers under a single framework?
- Complaint mechanisms for vendors – are they effective, do they inspire trust?
- Process for exclusion of bidders – on what grounds and how discretionary?
- Negotiations with vendors – how extensive can and should these be; what constitutes ‘negotiation’?
- Domestic preferences and preferences for (domestic) SMEs – the extent and economic desirability of such policies
These topics are clearly of broad interest to both public sector employees and also to suppliers who wish to benefit from Government business. Many of them reflect the increasingly complicated business environment and growing concerns over the quality and integrity of outcomes, rather than simply compliance with a process. Issues such as the method of acquisition, the negotiability of terms, the selection criteria for suppliers, the move towards value judgment are all direct examples of the shifting needs of Government in a fast-changing economy.
I am looking forward to Dan’s up-coming webinar – and meantime, please post your comments and suggestions on these topics so we can perhaps include them in the interview.